The Rise of Google's Advertising Empire

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January 2007

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For some time now, Google has been moving beyond its original pay-per-click search advertising model, a market it dominates. Its latest moves will make the company a player in a complete range of traditional media like radio and newspaper as well as new media like online video. As Cory Treffiletti, a senior vice president at agency Carat New York, puts it, “Google is becoming a cross-media megalith that offers one-stop shopping for any number of advertisers looking to reach their audience in a contextually relevant, cost-efficient manner.”

Google AdSense and AdWords. In the company’s own words, the omnipresent AdSense is a “way for website publishers of all sizes to display relevant Google ads on their website’s content pages and earn money.” Or how to turn virtually any site into a billboard. On the other hand, AdWords lets advertisers “display [their] ads on Google and our advertising network. Pay only if people click your ads”, advertises Google.

Google Display Advertising Network. Blogger John Chow says he was asked to join this top secret network by Google. “It was created so Google can go after Fortune 1000 companies, which buy advertising to build a brand more than to sell a product. Google has been hand-selecting sites that they want to put in front of Fortune 1000 companies. The goal being to sell these big companies display and video ads at a very high CPM – unlike the AdSense network, the display network is 100% CPM based,” writes Chow on his blog.

Google Audio Ads. More than 700 radio stations covering 200 metropolitan markets in the US have started testing this new online ad-buying system which Google developed by folding an acquired company’s system into its own AdWords online ad platform. The radio industry reportedly has mixed feelings about Google’s move. “A disaster could occur if people who were buying spots offline started buying online at a lower pricing level,” a radio executive told Reuters. “But by helping turn its vast audience of Web search advertising buyers into radio ad buyers, Google may eventually prove to be a boon for the industry.”

Google and newspapers. Since the end of November, 50 major American newspapers are testing a new system that lets Google sell them ads to appear in their print versions. Once again, the digital giant’s move into traditional media is causing some concerns in the targeted industry. The New York Times called the new system a “curious bargain” because “the publishers can get much-needed revenue but in doing so they may well make Google — which is already the biggest seller of online advertising — even stronger.”

Google Mobile. Google has seen the mobile light too. The company is optimizing content to run on mobile devices through Google Mobile. Mobile search is doing well and serving ads to mobile users should be on the rise.

Whatever next? TV most likely. As the biggest advertising medium, but a very inefficient one by online targeting and measurement standards, TV can’t be ignored by Google. Some industry watchers are saying that YouTube’s acquisition is providing the perfect opportunity for Google to start getting friendly with that industry too. And this just in from London: the UK’s biggest cable and satellite broadcaster, Murdoch’s BSkyB, is poised to launch an online, user-generated video-sharing site and search portal on its broadband service using…Google’s search, advertising and video functions. Does that sound like a competitor to YouTube or what? It sure does. How many more pies can Google get its fingers into?

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